Wednesday, July 22, 2009

As a child of the space age, it is hard not to be disappointed in the fact that we do not have human beings in permanent Moon bases, and should have landed humans on Mars some time ago.

On the other hand it is also easy to notice that space has been very largely the realm of state enterprises, whether that is American NASA, the Russian Cosmodrome, ESA of the Europeans or indeed the Chinese government.

But, of course, various treaties have dictated that no part of space, including the Moon, may be owned in any way except, as the Outer Space treaty has it, in common benefit for all mankind- and if "all" own something it is the same as if no one owns it.

Well, it is true that Columbus' expedition was a state enterprise, yet what brought the Conquistadors back to the Americas was the prospect of limitless wealth- albeit that this was wealth plundered from the native population.

There is wealth on the Moon, but there is no population, yet still, "private ownership" of the Moon is banned.

If we want to see people back on the Moon in our lifetime, it might be a very good idea to abolish the outer space treaty: to those that have the will and the courage to go to the Moon, then they should gain the benefits of their enterprise.

"We came in peace for all mankind and profit for those with the courage to come themselves": that is probably the only way we will go back to the Moon this century.

Monday, July 20, 2009

George Osborne does not know very much about the global financial system.

He took an upper second in History before failing to become a journalist. The only non political jobs he has ever held are as a data entry clerk for the NHS and at a well known London department store. After failing in his ambition to become a journalist, he began to work for Conservative Central Office. With a short stint working as a special advisor to Douglas Hogg at the Ministry of Agriculture and then in the boiler room at 10 Downing street, he stayed with the Conservative central organisation until his election as an MP in 2001 at the age of 30.

It is a fairly thin CV and not one that would get him much credibility if he were seeking work in a major firm in the City of London. However, with the arrogance that only the truly ignorant possess, he now presumes to inflict a whole new regulatory structure upon the London Financial system, by the abolition of the Financial Services Authority and the transfer of its powers to the Bank of England.

There is a case for critical regulatory change, but the disruption that Mr. Osborne proposes will be dramatic and long lasting. Almost immediately Hector Sants, the head of the FSA, has had to cope with a rapid exodus of key staff, and this is degrading the institution even before the Conservatives can even enter office. The problem is that Mr. Osborne, having had no executive experience, does not understand just how difficult it will be to implement the changes he suggests. The knock on effects of the changes will take several years to cope with, just as the creation of the FSA was itself disruptive. In fact it is the constant changes in the regulatory regime for the financial sector that have been a significant factor in the failures of the system over the past two years.

What is required is not yet another wholesale change in the system, but stability within the regulatory regime itself. Mr. Osborne, by seeking -as politicians will- to be "radical", is in fact condemning the financial regulatory regime to several years of drift and dislocation at a time when the financial crisis is very far from over.

It takes a very special kind of arrogance for a layman with no special understanding of the subject to insist on such a far reaching policy. Mr. Osborne is causing damage before he even enters the front door of number 11 Downing Street- it does not bode well for the rest of Conservative policy on the economy if one of its very few definitely declared policies is so badly thought out.

(Full disclosure: Hector Sants was my boss at UBS and is a man I greatly respect)

It was only 18 years from the 35 minute flight of Bleriot to the 35 hour flight of Lindbergh.

From that time, the pace of technological change seemed to accelerate dramatically. The invention of the jet engine by Sir Frank Whittle saw the first jet aeroplane, the Gloster-Whittle fly on May 15th 1941.

After the end of the Second World War, speeds became ever faster: the sound barrier was broken by Chuck Yeager on October 14th 1947.

Finally, on 12th April 1961, Yuri Gagarin became the first man into space. It was only 58 years since the first flight.

In December 1968, Jim Lovell, Frank Borman, and Bill Anders became the first human beings to leave Earth, and go into orbit around the Moon on Apollo 8. Just over six months later, Neil Armstrong and Buzz Aldrin became the first human beings to actually set foot upon the Moon on July 20th 1969. It was almost 60 years to the day since Bleriot had flown the channel.

Apollo was for me, as a child, and awe inspiring experience. From the majestic roar of the Saturn V rockets at lift off, to the journey through zero gravity, to the landing and exploration on the Moon itself and the eventual drama of splashdown, I would watch whatever was shown on the TV. The later missions, with the lunar rover, were already a giant stride beyond what Neil Armstrong's small step had achieved: each mission seemed to be one step closer to a permanent human presence on the Moon.

I remember that we were allowed home early from School to watch the splashdown of Apollo 17. At that time, we did not have the sense that space exploration would be diminished with the end of the Apollo programme. Although Apollo had been cut short, there was Skylab and it seemed that the simple momentum of getting to the Moon would lead to Mars and then maybe the stars beyond our world. It was a time when it seemed that all of the great works of science fiction would be seen in my lifetime. After all my grandparents generation had already seen the journey to the skies end up on the Moon. It had only been less than fifty years between the journey of Alcock and Brown and the Journey of Armstrong, Aldrin and Collins.

Yet now, as we celebrate the incredible human achievement of the Apollo missions, it seems that we have made a series of wrong turnings. The Space shuttle turned out to be the classic example of a camel being a horse designed by committee and after delays and the disasters of Challenger and Columbia, it seems that the last eight shuttle missions will set the seal on a frustrating lack of ambition. By definition, space is not a place and our journey into space was a voyage to nowhere. The Moon, on the other hand was, and is, a very definite destination. Since Apollo 17 commander Gene Cernan left the Moon, we have not sent human beings to explore.

Yet the unmanned space programme has achieved extraordinary things, from the Mariner and Pioneer probes to the outer solar system and the amazing pictures of deep space provided by the Hubble space telescope. This leads many to conclude that we should devote ourselves to sending our machines and not ourselves to explore the Universe. Yet this is to miss the point. Of course we should continue to learn as much as we can about what surrounds us, but the reality is that one day our curiosity for exploration will have to be satisfied.

Over forty years we have created the power of computers, developed carbon and nano technologies, and digitised our world, we have created instant communication and instant access to knowledge. yet we have not gone back to the Moon. The technology of information and communication is at a level that could not be conceived of forty years ago, and yet the proposed Orion Space rocket will use substantially the same engines that were used on the Saturn V all those years ago.

If you had asked by seven year old self what I would see in my middle aged years, I suspect he would have expected Moon bases and a Mars landing, yet now it may only be today's seven year olds who may see these things, and I am not sure that I will even live that long. Orion is currently only tentatively proposed for a Moon landing in 2019- fifty years after the first Moon landing.

Just before Apollo 8 lifted off from Cape Kennedy, the Astronauts received a visit from Charles Lindbergh. It was, said Borman, Lovell and Anders, a profoundly moving moment as one of the great legends of early aviation passed the torch to a new generation.

Twenty four humans have journeyed to the Moon:

Apollo 8Frank Borman, born March 14th 1928Jim Lovell, born March 25th 1928 (& Apollo 13)Bill Anders, born October 17th 1933

Apollo 11Neil Armstrong, born August 5th 1930Buzz Aldrin, born January 20th 1930Michael Collins, born October 31st 1930

Apollo 12Pete Conrad, born June 2nd 1930, died July 8th 1999Al Bean, born March 15th 1932Dick Gordon, born October 25th 1929

Apollo 13Fred Haise, born November 14th 1933Jack Swigert, born August 30th 1931, died December 27th 1982

Apollo 14Al Shepherd, born November 18th 1923, died July 21st 1988Ed Mitchell, born September 17th 1930Stu Roosa, born August 16th 1933, died Decmber 12th 1994

Apollo 15Dave Scott, born June 6th 1932Jim Irwin, born March 17th 1930, died August 8th 1991Al Worden, born February 7th 1932

Apollo 16Charles Duke, born October 3rd 1935Ken Mattingly, born March 17th 1936

Apollo 17Jack Schmitt, born July 3rd 1935Ron Evans, born November 10th 1933, died April 7th 1990.

Only 18 are left alive today. Who, I wonder, would be able to pass on the flame as Lindbergh did.

It seems now, looking back over the past forty years that the triple blow of the economic crisis of the oil shocks, the wretched failure of Vietnam and the horrid scandal of the fall of Richard Nixon diminished the confidence of America, which had been the prime driver of the triumph of Apollo.

Let us hope that at least some of the Apollo Astronauts can see their predecessors match their achievements. Perhaps at this time of economic adjustment and crisis, it is more necessary than ever to look to the stars.

Wednesday, July 15, 2009

The political conventional wisdom in Britain is that the increasingly tired Labour government, bereft of ideas, is headed for an inevitable defeat at the next general election, whenever that election comes.

The Conservatives are already considering the calibre of the large intake of new MPs that they expect to gain in the class of 2010- for May 2010, the last possible date for the election, now looks like the most likely date. The polls currently point to a sufficient advantage for the Conservatives to gain an outright majority and put David Cameron into 10 Downing Street as the fifty-third Prime Minister since Sir Robert Walpole took office in 1721.

Under the circumstances one might expect that we could now be getting a much clearer idea of the kind of ideas that will underpin the ideology of any future Conservative administration. Yet there seem very few clear pointers. Since all but one of the prospective Conservative MPs opposes the ban on hunting with dogs, we may expect that this may be repealed. Yet on the critical issues of the day: the economic crisis, the continuing war in Afghanistan the opinions of Conservative politicians are expressed surprisingly sotto voce.

Only on the European Union has David Cameron expressed a decisive preference- unfortunately it has been a demonstration of exceptionally bad judgement. The Conservatives who have broken away from the mainstream right wing alliance, the EPP, and created their own, more sceptical alliance have followed a quixotic and counter productive policy. With the continuing rebellion by some Conservative MPs, the Conservatives have proven unable even to lead their own creation. It is a considerable embarrassment. While the public blame for the fiasco has gone to Edward Macmillan-Scott who has been expelled from the Conservative delegation, the real cause of the problem lies in the poor judgement of David Cameron who has rejected considerable counsel in order to demonstrate his own Euro-scepticism. As usual, the issue of Europe- relatively unimportant in the eyes of the electorate- continues to create humiliation for the Conservatives.

So apart from counter-productive Euro scepticism and a commitment to reintroducing fox torturing what will the Conservatives actually bring to their prospective tenure in office?

Well certainly not leadership, it appears.

This week has seen the public breaking of the consensus over the war in Afghanistan. The long suppressed mumblings of dissent amongst the military have finally become a consistent roar. The large loss of life this week has brought to a head the fact that the UK must make a strategic decision either to commit far more resources and ensure that our troops have the equipment and the numbers to achieve their strategic goals, or if those strategic goals can not be achieved then it is important either to adjust the strategy or to leave the war zone altogether. Such are the decisions that we face. But it has not been David Cameron who has placed this critical issue at the centre of an honest debate before the British people, it is Nick Clegg the leader of the Liberal Democrats.

Meanwhile the increasingly serious economic crisis underlines the incredible risks that Labour is taking with their policies of massive expenditure. As unemployment continues to rise, it is clear that the government has failed to achieve its policy goals. In order to stabilise the economy it is quite clear that substantial government cutbacks are now essential. It is not David Cameron or George Osborne that have pointed out these home truths, it is Nick Clegg and Vince Cable, the Liberal Democrats' Shadow Chancellor.

On issue after issue David Cameron is demonstrating a political cowardice that is rapidly becoming his most obvious calling card. If he intends to lead then it behoves him to tell the British People how he intends to do so and what his political lodestone will be.

The suspicion is growing that Cameron offers only a warmed-over and partial Thatcherism combined with a Blairite commitment to dishonesty - but without the courage to say so. In a few years time as Mr. Cameron looks to the money of the retirement lecture circuit it is increasingly likely that even if he can obtain a majority, his government will rely on the inanities of public relations rather than the intellectual discipline of real leadership. His administration would have been a failure and a failure based on poor judgement and intellectual cowardice.

Moreover there is still the distinct possibility that despite the political and economic bankruptcy of the Brown government, the electoral system does not deliver a decisive victory. A replay of 1974 with Mr. Cameron or Mr. Brown seeking an early second election to gain a bare majority is a real possibility. However in the face of the second phase of the economic crisis, the global markets could punish the UK severely for such a political vacuum. Talk of coalitions- anathema today- could be critical for the stability of the Pound and indeed the wider economy.

Does Mr. Cameron have the judgement to lead in an economic environment of growing crisis and a political environment that could be dramatically different from any we have seen in a generation?

His mistakes over Europe suggest that his judgement is cloudy at best- and that is partly why support for the Conservatives is fragile.

The Tories will quickly learn that just "not being Labour" may not be enough to get Cameron the job he so keenly desires.

Frankly, I don't think he can, and I think that one of David Cameron's most commendable characteristics - his loyalty to his colleagues- is in grave danger of proving to be his greatest weakness. It was always going to be a risk hiring Coulson for the big - and very well paid- job of Director of Communications. The fact is that Coulson had indeed had to resign over the bugging of phones of members of the Royal household. That was a specific case and the Police decided that even though he was the editor, he did not have a case to answer. So only two, more junior, figures were sent to gaol.

However, what the Guardian allegations reveal is that the operations were on such a gigantic scale that the editor of the News of the World could hardly have failed to know about them. In other words it does seem that Mr. Coulson has a case to answer, and although Assistant commissioner, John Yates has indicated that further prosecutions will not be forthcoming on current evidence, this position could change if further evidence is revealed. Meanwhile, there is the issue of civil action- and that could really get messy.

Coulson is horribly exposed and Cameron would be making a grave error of judgement if he decides to keep him and then finds that he is submerged in a blizzard of litigation- even without criminal prosecution. As with the tangled affair of George Osborne last summer, Mr. Cameron may find that loyalty has a price for his own credibility. The Tories can not yet be so confident that they can dismiss this- and to try to do so looks like complacent arrogance.

The picture is a recent one and shows an RAF Typhoon intercepting a Russian Tu-95 Bomber, NATO designation "BEAR". This is skirting British air space after having overflown Norway. It is a deliberate military incursion by the Russian Air Force: it is an entirely hostile act.

It is also far from unique. According to the House of Commons Defence select committee there have been at least 18 such unauthorised military incursions into British air space in the past two years.

The point of the RAF releasing this photograph is, however a pointed one. The Tupolev 95 may not be as primitive as it looks, it has turbo prop- not piston- engines and a very long range. However the weapons systems on the Typhoon could have shot down the Russian craft well before the Russians were even aware that a Typhoon was in the area- after all the Typhoon only came into service less than two years ago and carries highly advanced systems. Comparing the 1960s era Bomber and the latest fighter underlines that Russia's challenge to the West lacks a certainly level of credibility.

However it also underlines the fact that Russia- through its own choice- has returned to being a hostile power. As the Defence committee points out these are "not the actions of a friendly power".

As even IKEA chooses to abandon its plans to invest in Russia and the level of corruption under Vladimir Putin reaches utterly incredible levels, Russia is retreating into poverty and isolation- and deep hostility. The criminally corrupt cabal that controls the Kremlin is using pride in its military as a rallying cry to turn the growing unrest in the country outwards.

The poor, isolated and paranoid bear still has the capacity to create murder and mayhem on its borders: as the people of Georgia know only too well. As the defence committee says: the time has come to be much more robust in dealing with Putin. Holding the line now may prove a good deal safer than when Russia has decided to make a direct military threat to NATO.

The Conservatives have found themselves in a certain amount of trouble on this: Andy Coulson, the Tory Director of Communications, was the editor of the News of the World before he was forced to resign over some specific allegations of phone taps against members of the Royal Household.

David Cameron has said that he is "very relaxed" about the issue. The point being that the out of court settlements that News International were forced to make took place after Andy Coulson had already left the editorship.

The problem is not whether or not Mr. Coulson knew about the settlement- the point is whether or not he knew about the phone hacking. The fact is that his denial of knowledge of the settlement is a classic example of misdirecting the media. There is considerable evidence that Mr. Coulson did in fact know that phone hacking was going on- and his statement is a "non-denial, denial".

Under those circumstances David Cameron needs to be a whole lot less relaxed. The fact is that Andy Coulson may yet face criminal charges. Certainly this scandal is considerably more serious than the ridiculous expenses farrago.

Monday, July 06, 2009

It is not easy to find a crowd in a country as small as Estonia. The population of the whole country is only 1.4 million and there is the general solitariness of the Estonian character to be taken into account. Yet, every five years the whole country gathers together with a common purpose: to sing.

The Song festivals of the Baltic countries are an astonishing spectacle. Not only do people gather together on an epic scale, but the singing that emerges from choirs of twenty or thirty thousand people is glorious, with subtle harmonies and counterpoint.

These performances of beloved and ancient tunes are watched by a substantial fraction of the rest of the country. Yesterday a choir of 25,000 at the Tallinn song festival was watched by well over 120,000 in the audience. As a spectacle it was impressive, but it was the emotional impact that soared above all else. The songs were mostly gentle evocations of the land and people of Estonia- patriotic yes, but celebrating the light, the land and the homespun Estonian language itself.

Songs, once banned under the dreadful years of the Soviet occupation, were sung out with a joy that rose at times to a kind of glee- an emotion that one rarely associates with the stolid and serious Estonian character. Ten years ago I attended my first song festival, but that was on a far smaller scale, Yesterday the choir even kept on singing after the conductors had left the podium as if to prolong the five-yearly gathering just a little longer.

This year is also the anniversary of the first display of the Estonian flag in 1884, and there have been a whole series of events to celebrate- and in truth I have never seen such a spectacular display of flags as at this song festival. The choirs and indeed the whole crowd were a waving sea of the Estonian blue-black-white national colours.

The simple happiness of being able to sing, the pride and sheer delight in the music was palpable. The music underlined the sense that -at last- this much abused nation has finally found her freedom and self respect after the dark years of terror and then stagnation. As the huge choir launched into one of the most beautiful, calm and serene of the songs, Mu Isamaa on minu arm- My homeland is my delight- joined by many in the audience, I found my heart was singing and my cheeks were wet with tears.

Friday, July 03, 2009

I am here to participate in the Lithuanian World Economic Forum an event which last took place 17 years ago, but has been revived in conjunction with the celebrations of the Millenium of the Lithuanian state and the reign of Vilnius as European capital of culture 2009.

It is a very Lithuanian affair, and the several hundred delegates have all been selected as "foreign Lithuanians". It is in fact an outreach to the hundreds of thousands of sucessful Lithuanian ex-pats. I suppose it is a tribute to the longevity of my relationship with Lithuania that I am one of the very few non-Lithuanian speakers to have been invited. I am, apparently, a Lithuanian ex-pat, resident in Estonia.

The fatted calf has certainly been slaughtered in honour of these particular prodigals: yesterday the outgoing President, Valdus Adamkus hosted the first session at the Presidential Palace, and several of the most prominent members of the government- notably the foreign minister and the economy minister- have been active participants in the conference.

I too have made a contribution, being part of a panel with the Prime Minister and some of the best known Lithuanian investment professionals (and Bill Clinton's Deputy Treasury secretary who wife is Lithuanian). It is refreshing to see how open the political leaders of this country are and Mr. Kubilius accepted comments with a grace and intelligence that would be astonishing if it had come from the mouth of-say- Gordon Brown. His wry comments about the extraordinary difficulties that his government has to work with were greeted with appreciation- even by his political opponents. Yet the government situation, despite the relatively recent general election, is in a certain amount of flux- all Ministers must await reconfirmation after the new President, Dalia Grybauskaite, is sworn in next week.

Nevertheless, despite the financial crisis there is a definite air of celebration in the air. July 6th, is a national holiday- commemorating the coronation of King Mindaugas in 1253. In addition to the Capital of Culture, it is also the five yearly occasion of the Lithuanian song festival, where choirs of tens of thousands are watched by an even larger audience. Although the economic position is indeed grave, Lithuanians seem determined to enjoy the muggy days of the brief summer here and get back to work when the parties are over.

I shall drive back to Tallinn tomorrow- the slow roads making the journey a bit of a hike- three and a half hours to Riga and then another three hours back to the Estonian capital. Then I shall reflect on the determination of Lithuanians to reach out and the equal determination of the Estonians not to.

Thursday, July 02, 2009

The narrow cabal of four KGB officers that controls Russia under Vladimir Putin has a brutally Manichean view of power. They do not believe in mutually beneficial negotiations, but only in the effective wielding of control. Thus they are a dangerous factor in the international community since any success for the West, by definition, must imply a loss for Russia. Even worse, Putin has a grievance against the current world order: he explicitly laments the fall of the USSR and intends to reconstruct the old power relationships whether using the power of Russian resources and money or- as in Georgia and Moldova- using Russian military power.

Having acquired power by underhand means- planting bombs that killed 300 people- it was always clear how ruthless the Putin clique was. Yet, in the end this very ruthlessness was part of his attraction to the Russian people. Putin acquired respect, precisely because of his KGB heritage. He projected competence, in sharp contrast to the last years of the hapless Boris Yeltsin. Furthermore this image of competence was underpinned by the huge flow of money into Russia as the oil price surged and the prices of all commodities doubled in the last crazed year or two of the boom. Putin's decision to focuss his attention on oil and gas did not look risky- it looked inspired.

Yet over the last year the oil gusher has fizzled out and the clear risks of concentration on extractive industries are now obvious. National income has fallen dramatically, and the Rouble has faltered in the currency markets. Now, a report from Fitch underlines the dreadful state of health of the Russian banking system. At least $22 billion of new capital is needed, and with losses mounting by the month, that sum could end up becoming over $60 billion. Meanwhile, in a futile attempt to ease the decline of the Rouble, Russia has seen its once healthy reserves fall at a spectacular rate. In the face of multiple calls on the public purse, including a dramatic increase in military expenditure-even the $300 billion of reserves that Russia had last year could be quickly squandered.

Meanwhile unrest continues to grow. The sudden imposition of an import tax on second hand cars- more or less the sole profitable business in Vladivostok- caused riots in the Russian Far East . Meanwhile government decisions become more dramatic and arbitrary in the face of ever worsening economic predictions. Now, however, we begin to see the Putin regime in a new light. During a carefully staged trip to a local supermarket, Putin demanded that the price of sausage be cut. Such populist gesturing has become a hallmark of Putin's rule- but it underlines a growing feeling that Putin is- whisper it- incompetent. The ludicrous misunderstanding of economics serves to show that Vladimir Putin is not a populist in touch with the national mood, but a fool who retains his Soviet mindset in economics as he has in geopolitics. His increasingly arbitrary statements reflect a man who is losing touch with reality.

The pressure on the regime is growing stronger. The outlook is increasingly unstable, with even the moderate increase in the oil price failing to ease the pressure. With the outlook growing bleaker in the financial markets that pressure is set to grow dramatically. The increasingly arbitrary and incompetent Mr. Putin is on the eve of his toughest test.

Wednesday, July 01, 2009

The hot dog days of Summer bring an even greater ennui to the fetid business of politics.

Flaming June gives way to a muggy July and few in the political world are doing more than look forward to the escape from Westminster. John Redwood argues that this exodus amounts to Parliament being part time. In his occasionally populist way, he argues that the sessions of Parliament should be longer. Most MPs, especially those in marginal seats might argue that they have plenty to do in their constituencies, and most constituencies are a long way from London, unlike leafy Wokingham. But actually is Mr. Redwood's fundamental idea actually right?

Actually I think he is dead wrong.

Parliament is- or ought to be- a council of the nation, bringing individuals with wider experience and differing interests together to control the public purse and pass legislation as required. Until recently the idea of a full time, professional politician would have seemed ridiculous. Political figures were those who, after having made considerable personal achievements, would devote their talents to the service of the state. Such service was not to be actually paid for by the nation at all. Sure in the past, the perquisites of office led to a measure of corruption, the Cabal and the Lloyd George sale of peerages only some of a long list. Yet, particularly in the nineteenth century the idea of public service was one that imbued the whole ethos of the Mother of Parliaments.

Yet can I be alone in thinking that the creation of a full time Parliament of political hacks is precisely what we should NOT be doing?

If Mr. Redwood is right and we have a part-time Parliament, then what, precisely, is wrong with that? The longer Parliament sits, the more unnecessary legislation it will be tempted to pass, and the less MPs will interact with anyone else outside the political class. It is the isolated nature of the political class that has got Parliament into such low public esteem as it is.

They will have come up through the standard career path for politicians, think tanks, "advisor" non jobs or possibly from having been a local councillor (full time and professional, of course).

They will be compliant and loyal.

I could hardly think of a better definition of a Parliament of Eunuchs.

Cameron -as a political hack himself- seems to want to finally close the door on any MP who has not come to the job without being a paid-up member of the political class.

If his front bench politely decline his diktat that second jobs should be abandoned, then I and many others, will be cheering them on.

The sanctimonious political hacks will cry foul and seek to smear second jobs as making their holders less committed to the work of Parliament. Yet frankly I see a second job as something that should be compulsory for MPs. That way they would engage with the electorate as something more than simply those whose votes they need to join the political class.